It is hard to find an industry or profession that has not used the technological advancements of the last 10 years to improve its systems and services.  The risk of failure and falling behind competitors has driven many companies towards the rapid adoption of new tools in order to bring an innovative approach to their operations.  The products are innovative and so, in turn, are the processes of the organisations that use them to improve their performance.

Auditing is no exception and with the widespread availability of wireless internet access, it has become possible to audit an organisation anywhere in the world without leaving the office.  Faced with growing costs and diminishing training budgets, many businesses are taking advantage of the solutions offered by remote auditing software providers, rather than continuing with just traditional auditing techniques – they are adopting a new auditing mix that includes these tools.

Remote auditing has not been accepted by everyone, but those who have become advocates preach of the ‘unlimited possibilities’ and improved results.  So has it improved the process?

ONE GIANT LEAP FOR AUDITORS
Much of the information that is traditionally gathered by auditors in person can now be accessed using an internet connection, email or online auditing software.  This includes document reviews and interviews, both of which can be conducted remotely.  This use of technology by auditors can make it easier to reach locations that may previously have been expensive or difficult to reach.  Web cameras and video conferencing even allow auditors to observe what is happening thousands of miles away.

Writing for the International Register of Certified Auditors (IRCA), Colin MacNee, a quality management consultant at IBM, said: “Remote audits offer the possibility of significant time and cost savings, yet many auditors seem to remain wary of an approach that means they are not physically present at a location.  However, many of the concerns voiced about remote auditing are similar to those of traditional onsite audits and, when offsite auditing is considered as an addition to the auditors’ toolbox, it can offer a variety of benefits.”

THE CONSTRAINTS OF TRADITIONAL AUDITING TOOLS
As the process of innovation begins with identifying a problem, it is logical to ask: what is the problem with traditional auditing?  Rob Fisher is group HSQE manager at ASD metal services, a steel stockholder with operations based all over the UK and Ireland.  ASD is accredited to ISO 9000 and is required to carry out annual internal audits on its systems and procedures throughout all of its sites.  It also undertakes health and safety audits and will soon be audited against the environmental standard, ISO 14001. Rob says:

“The traditional way of auditing is having a one-to-one question and answer session where the audit is structured around a part of the process or a procedure.  But obviously it’s very labour intensive for me to go around 30 units asking a long list of questions.  If you’re based at one location, it’s not too bad, but some organisations are separated by distance, language and different levels of ability.

We used to rely on internal auditors who were based at each unit.  That required us to train a number of people up to a competency level necessary to undertake and write audit reports on each site.  It took people who worked, for example, in sales or administration, away from their core activity and it was also very expensive to train them, pay their travel and accommodation costs. In fact, we were spending over £125,000 a year.”

While the costs of traditional auditing appear to be prohibitive for some, the process also became problematic.  Rob says:

“The information had to be reported back to me so that I could assess the strategic view of the company but for those auditors, trying to communicate the issues is very difficult.  If I wrote an audit report on the sales process and you wrote one on exactly the same process we’d come up with different issues, different ways of writing it, different ways of communicating it and different ways of interpreting it. For me, collating all of this information and trying to produce a meaningful document that represents every unit was very time consuming and quite difficult.”

Richard Butterfield is business improvement director at Amey, an end-to-end service provider, operating primarily in the public sector.  Amey has used remote methods as an approach for assessing its own Lean maturity.

Richard says:

“With traditional approaches to auditing and assessment, a lot of the time you are only sampling a relatively small part of the organisation.  This can be problematic because you’re forming an opinion or allocating a score based on a tiny sample, so quite often you know that your findings may be statistically irrelevant.

We have over 11,000 staff, so to give the organisation any kind of score can be incredibly difficult.  For example, imagine that you undertook a multi-site week-long assessment using a team of 10 assessors.  They would typically operate in pairs, conducting intensive interviews with around eight individuals or small groups a day and then write them up.  The result would be an assessment based on around 200 to 400 people in a week.  Not many organisations could afford to pay for a team of 10 assessors for a week and even if they could, the result only represents less than 5% of the population.  The data set is not representative or adequate enough for any kind of realistic analysis.”

AUDITING IN CYBERSPACE – FASTER AND BETTER?
While traditional auditing, ‘in person’, continues to prove effective for many organisations and many do not experience significant problems, the evidence from other businesses demonstrates that there is a demand for improvements.  Innovation enables different and improved ways of doing things, in this case auditing.  Some can be incremental and some can be step-change, but all are useful.  For example, at the heart of the auditing and assessment approach that Rob and Richard describe is an audit method that owes itself more to the behavioural sciences than quality management.  This approach could in theory be delivered by human auditors but the use of IT allows it to be delivered cost effectively, while at the same time addressing many shortcomings of current approaches.  In certification terms the approach is therefore not computer ‘aided’, but rather computer ‘enabled’, as evidence collection still takes place on site, without an auditor taking part. It is a lot further along in the innovation continuum than tools such as surveys, webcams, conference or video calls; delivering an ‘intelligent ‘assessment of organisational competence and capability.

Auditors are searching for new, efficient ways to gather and analyse evidence consistently. Some auditors have adopted a mixed approach, using site visits and some elements of remote auditing, while others are already using innovative techniques created from the search for ‘breakthrough’ audit techniques that truly deliver business improvement.  Not surprisingly, these techniques rely on the use of ‘cyberspace’ and other IT developments.

Rob says:

“Several years ago, we began working together with the an organization, High Performance Organisation (HPO), to look at how we could streamline the auditing of our business.  That’s when I realised that remote auditing was a great example of innovation in the audit industry. HPO helped us to embrace a new internal auditing system where I set the questions here in head office and then the question sets go out to the units for them to answer online. HPO host the website, help me construct the question sets and provide me with the information.

“When we introduced remote auditing it had never been heard of before. We are audited by BSI so they had to approve it to make sure that it conformed to their auditing techniques and met the standards.

“We know what the question sets are, we know what the performance drivers are and we can measure against those against our objectives and targets. We use continuous auditing, which would traditionally require maybe 25 or 30 questions for staff to answer. But now they only have to answer five questions on a regular basis so that we continuously receive information about our sales and how our procedures and policies are working. The technology allows us to dip into any audit, any time, and see how we compare against previous months.

“It means that each employee can go online, fill in a ‘questionnaire’ that collects their experience and that data is immediately analysed against what is important to our business and is then available to me. So we now have a number of people throughout the organisation being asked the same question on a regular basis and that gives you an indication of how the company is moving forwards. The availability of information and the clarity of the documents is much better. The time from undertaking the audit, to getting the data into a meaningful document is instantaneous. That time is valuable.”

The tool has also been picked up by certification bodies. John Pymer is group managing director of UKAS-accredited global assessment and certification body, Certification International. He says:

“When we heard about online auditing, it really clicked and made sense. There’s no such thing as a super-auditor who can stroll into a business and really understand what’s going on there within only a few days of auditing. The online approach allows a contribution from as many people as you want, so the picture is vastly more informative than you could ever get from the traditional blend of face-to-face interviews and looking at records.

“Remote auditing cannot be ignored now. It’s a logical progression to have the client’s staff anonymously complete the online survey first, so that when you make the onsite visit, you have all the information to hand.

“Some of our clients have been very impressed. In some cases it has highlighted operational concerns that we wouldn’t have detected through traditional auditing. We run it ourselves over 20 different countries and it has identified problems that have remained hidden for years. It is a phenomenally improved way of gathering real-world data.”

The approach is not limited to traditional audits and standards either, with remote auditing also being used to assess organisations against a vast array of business improvement models.  Richard is another advocate of this particular innovative approach to assessment. His remote assessments for Amey use behavioural-based questions that ask respondents to select from short lists of experiences, the options that are closest to their own experiences, across a number of every day situations. The science behind the methodology is renowned for its ability to elicit truthful answers. According to Richard, it also improves the process for the respondent because an assessment response only takes five to 15 minutes to complete.

Richard reflects on cyber auditing:

“If I take myself back to some of my EFQM site assessment days, they were incredibly expensive, laborious and time consuming exercises.  Now I can get the same outcome with a sample size that’s 50 times bigger, with next to no cost and effort.

“You can get a picture based effectively on the behaviours of a much bigger percentage of the population of the organization.  If you’re still doing site assessments you can be much more targeted and focussed in the site assessments because you’ve got a picture of the whole landscape of the organisation that you’re subsequently going to assess onsite.

“In a month, we were able to sample half of our employees. It gave us a picture across multiple locations, which we could then break down into 100 sub-locations. The technology allows us to slice the data across all different sections of the hierarchy, through leadership, the various management and supervisory layers, and the people delivering the work.”

IMPROVING INNOVATION
The process of innovation requires constant review and development, so because it is new, remote auditing is not the finished article yet, according to many who use it.  While it brings a number of benefits, there are also some risks that are linked to common problems with modern day technology.  Colin MacNee points out: “The security of the internet connection must be taken into consideration. All such issues should be addressed in the planning phase.

“You must also put in place contingency plans in case anything goes wrong with the audit or technology.  If a phone line goes down, an internet connection is broken or something at the site interrupts the audit, it must detail in the next step.”

Rob says that sometimes the reports were not presented very succinctly when remote auditing was in its infancy, making the process of analysis too drawn-out, although this has already improved.  He says:

“Software developers have introduced continuous improvements. One of these was reducing the number of questions from 30 to five. So you get more of a buy-in from people.

The remote system used to produce one standard fifteen page document but now it creates summary reports and executive reports, which is useful information rather than just information overload.”

As technology improves, so will the tools available to auditors. Among developments for the future, Rob adds that video conferencing could play a more prominent role in the future of remote auditing.  So while improvements have already been made along the innovation chain, there are still plenty of possibilities to expand this technique.

FINDING THE RIGHT BALANCE
Despite the notable benefits of remote auditing, most users recognise that, like other systems that rely on technology, it has its limitations.  The importance of finding a balance appears to be paramount.   Rob says:

“I still do site visits and I also have to do health and safety visits too. You need to have a little bit of a ‘touchy-feely’, rather than just relying on a computer system completely, but I would say the split is now about 60% remote auditing, 40% in person. Some things you have got to see with your own eyes to ensure things are being done the way that you want them to be done, not how somebody perceives them to be done.

“Sometimes you have to be there to ensure the compliance aspect is correct, that they have got the documentation in place and the signatures are right, for example. However, from the auditing side and making sure that the processes are okay, we do virtually everything on a remote basis.”

Remote auditing is particularly effective for gathering and reporting operational information ahead of a site visit, according to John. He says: “There must always be a mix of assessment techniques.  The client can run an online assessment, then the analysed can focus the audit team when they do go on site; enabling more constructive use of their time.”

THE FUTURE OF AUDITING
The future of remote auditing appears to be rosy.  While there has been resistance, the role of technology is seen by those in the know as an inevitable progression that allows innovators within the industry to make business better.

Richard has encountered this resistance, but is adamant that the process has been improved.  He concludes:

“In terms of adopting remote assessment, I’ve found that for some organisations there’s a lot to overcome still, in terms of embedded thinking, culture and commercial drivers with some of the accreditation bodies.

“But remote auditing and assessment is such a big step forward for selective site assessment that it really has taken the process forward in one giant leap.”

Previously published by QW Systems – Remote Auditing, April 12, 2012 (C) by Robert Gibson. Used by permission.